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According to Michael McCoy, senior vice president at Central, the reason the RIA exists is largely due to Bernard Madoff.

The firm is actually a department of Central Bank, a commercial bank that’s “been around for about 109 years,” but while the group has provided investment services to its clients for approximately 15 years, it’s a child of the financial meltdown. Says McCoy, “In light of Madoff, etc., we decided to register [the RIA portion with the SEC in 2009] and become a full-fledged RIA to provide a level of comfort for our customers.”

As a result, Central is considerably different from the other top firms on the list. With three principals and a client list that is made up of institutional clients such as hospitals and insurance companies that have a relationship with the bank, according to McCoy, the RIA is “just add-on services that we provide to institutional clients … It’s an investment service that all these clients of the bank need, and rather than them go elsewhere, we had the talent and expertise to help them with those functions. So we’ve been doing it at least 15 years that I know of.”

‘It was important that they have a legal structure’

Still, with scandals and financial losses littering the headlines in 2008, says McCoy, “we decided to formalize what we do by registering with the SEC. our customers didn’t necessarily ask for that,” he adds, “but we … felt like it was important that they have a legal structure they were working with.”

Despite the financial turmoil of the time, he says, the group lost no clients during the period. “They’re all institutional clients,” he says, “and to some extent understand the ups and downs of the market—although that was kind of a hundred-year event.” With the existence of the official RIA so new, after having done business for a considerable time, and with the group being so small despite managing considerable assets, a succession plan is still in the works. However, the clients don’t seem to mind.

‘We’re a bank’

Asked how Central differentiates itself from other firms such as wirehouses and trust companies—and banks—McCoy says, “Here’s how we sell ourselves. First of all, we’re a bank.”

“Our clients have already known us for a long time,” he says. “All of our clients are here in Jefferson City. We see each other on the street, in church and at the Kiwanis Club, and we’ll do what’s best for them. We have to live in the same town, so we’re going to do what’s right.”

Growth is not really an issue for Central. “We don’t market ourselves,” says McCoy, although “if we run into a client through a banking relationship—a parent bank of a bank holding company—it might spark a relationship that way.”

In fact, the RIA has grown since its formal creation, adding its third principal with a background in the brokerage business—actually coming from the brokerage arm of the bank, which employs about 30 retail brokers, says McCoy—bringing some additional institutional clients into the fold. Other growth has been organic.

He adds that the volatility of the markets is an issue. “Our clients are institutional in nature, but that doesn’t alleviate their sensitivity to seeing the volatility of their market values,” he says. “We had some difficult meetings during 2008–2009 with some clients,” he concedes, “but fortunately they trusted us enough to stick with us for a while.”